Slack demand, competition weigh on Indian onion exports

1 hour ago 19

India’s onion exports have come under further pressure this financial year, reflecting a sustained decline driven by changing global market dynamics.

Shipments have slowed primarily due to reduced offtake from key buyers such as Bangladesh and Saudi Arabia, as these countries increasingly rely on their own domestic production, exporters said.

Policy impact

This structural shift in demand has curtailed the shipment volumes, even as competitive pressures are weighing on exports.

The weaker currency of Pakistan, a major competing origin, has enhanced its price competitiveness in international markets, making it more difficult for Indian exporters to defend market share, particularly in price-sensitive destinations.

“Demand is there, but we have lost some markets. Bangladesh, one of the biggest buyer, is not buying from us. Lot of countries have developed their own crop; now even Saudi, a good buyer, is not buying,” said Ajit Shah, President, Horticulture Exporters Association.

“Also, India had imposed a ban 2-3 years ago. So all our traditional buyers shifted to other suppliers like Pakistan, Sudan and Yemen,” he said.

Earlier, these countries used to export in small quantities, about 2-3 months a year. Now they are exporting for 6-7 or even nine months a year, Shah said, adding that as a result, “buyers had started comparing our price with these other suppliers”.

“Our quality is always good as compared to the other suppliers, but now every market is price sensitive. So our quantity, our share of demand has decreased and that’s why the export is not going so much. But it’s not so less also,” Shah said.

According to DGCIS data, India’s onion exports during April-December of the current financial year registered a 22 per cent decline in value terms at $298.69 over the corresponding last year’s $380.08 million on lower prices.

Volumes up

However, the shipment volumes during this period were up 37 per cent at 11.33 lakh tonnes compared to 8.26 lakh tonnes in the corresponding last year.

In fact, onion shipments have been on a downward trend in recent years when a ban was imposed in December 2023 until March 2024 to ease domestic supplies. All restrictions were removed by March 2025 when supplies improved.

Further, Shah said, Bangladesh, when it doesn’t have its own crop, is buying the maximum quantity from from Pakistan, whereas Saudi Arabia is buying from Yemen and Sudan.

“Our prices are similar or up by say $10-50 per tonne, when compared with onions from Sudan or Yemen. However, we are expensive in comparison with Pakistan as there is a vast difference in their dollar rate and our rate. Our dollar-rupee rate is 90.5, while their dollar to Pakistan rupee rate is 280 and that’s the main reason they are cheaper than us in the international market,” Shah said, adding that weaker currency is giving them an edge.

However, Indian onion exports are taking place to countries such as Sri Lanka and West Asian countries, Shah said, adding that the rabi arrivals will be starting soon.